For Several Years,a Client's Physical Inventory Count Has Been Lower

question 45

Multiple Choice

For several years,a client's physical inventory count has been lower than what was shown on the books at the time of the count so that downward adjustments to the inventory account were required.Contributing to the inventory problem could be weaknesses in internal controls that led to the failure to record some

• A) Purchases returned to vendors.
• B) Sales returns received.
• C) Sales discounts allowed.
• D) Cash purchases.

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Definitions:

Equilibrium

A state in which market supply and demand balance each other, and as a result, prices become stable.

Market

A venue or mechanism where buyers and sellers come together to exchange goods, services, or information.

Price

The amount of money required to purchase a good or service, determined by factors such as demand, supply, and production costs.

Producer Surplus

The difference between the amount that producers are willing and able to supply a good for and the amount they actually receive (selling price).